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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission File Number: 001-37383

 

Arcadia Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-0571538

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

202 Cousteau Place, Suite 105

Davis, CA

95618

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (530) 756-7077

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common

RKDA

NASDAQ CAPITAL MARKET

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 ☐

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

As of November 8, 2021, the registrant had 22,184,235 shares of common stock outstanding, $0.001 par value per share.

 


 

Arcadia Biosciences, Inc.

FORM 10-Q FOR THE QUARTER ENDED September 30, 2021

INDEX

 

 

 

 

 

 

 

Page

Part I —

 

Financial Information (Unaudited)

 

 

 

 

 

 

 

 

 

Item 1.

 

Condensed Consolidated Financial Statements:

 

1

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

 

2

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

3

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

4

 

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

5

 

 

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

34

 

 

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

34

 

 

 

 

Part II —

 

Other Information

 

35

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

35

 

 

 

 

 

 

 

Item 1A.

 

Risk Factors

 

35

 

 

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

35

 

 

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

35

 

 

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

35

 

 

 

 

 

 

 

Item 5.

 

Other Information

 

35

 

 

 

 

 

 

 

Item 6.

 

Exhibits

 

36

 

 

 

 

 

 

 

SIGNATURES

 

37

 

 


 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Arcadia Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,526

 

 

$

14,042

 

Short-term investments

 

 

 

 

 

11,625

 

Accounts receivable

 

 

1,453

 

 

 

1,406

 

Inventories, net — current

 

 

5,447

 

 

 

3,812

 

Prepaid expenses and other current assets

 

 

1,408

 

 

 

811

 

Total current assets

 

 

43,834

 

 

 

31,696

 

Restricted cash

 

 

 

 

 

2,001

 

Property and equipment, net

 

 

2,634

 

 

 

3,539

 

Right of use asset

 

 

3,486

 

 

 

5,826

 

Inventories, net — noncurrent

 

 

3,539

 

 

 

3,485

 

Goodwill

 

 

1,648

 

 

 

408

 

Intangible assets, net

 

 

3,905

 

 

 

370

 

Other noncurrent assets

 

 

182

 

 

 

23

 

Total assets

 

$

59,228

 

 

$

47,348

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,004

 

 

$

4,105

 

Amounts due to related parties

 

 

51

 

 

 

80

 

Debt — current

 

 

36

 

 

 

1,141

 

Unearned revenue — current

 

 

 

 

 

8

 

Operating lease liability — current

 

 

1,134

 

 

 

717

 

Other current liabilities

 

 

264

 

 

 

263

 

Total current liabilities

 

 

6,489

 

 

 

6,314

 

Debt — noncurrent

 

 

78

 

 

 

2,105

 

Operating lease liability — noncurrent

 

 

2,562

 

 

 

5,389

 

Common stock warrant liabilities

 

 

7,736

 

 

 

2,708

 

Other noncurrent liabilities

 

 

2,140

 

 

 

2,280

 

Total liabilities

 

 

19,005

 

 

 

18,796

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value—150,000,000 shares authorized as
   of September 30, 2021 and December 31, 2020;
22,184,235
   and
13,450,861 shares issued and outstanding as of September 30,
   2021 and December 31, 2020, respectively

 

 

63

 

 

 

54

 

Additional paid-in capital

 

 

257,009

 

 

 

239,496

 

Accumulated other comprehensive income

 

 

(24

)

 

 

 

Accumulated deficit

 

 

(217,203

)

 

 

(211,825

)

Total Arcadia Biosciences stockholders’ equity

 

 

39,845

 

 

 

27,725

 

Non-controlling interest

 

 

378

 

 

 

827

 

Total stockholders' equity

 

 

40,223

 

 

 

28,552

 

Total liabilities and stockholders’ equity

 

$

59,228

 

 

$

47,348

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


 

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

2,324

 

 

$

245

 

 

$

4,506

 

 

$

630

 

License

 

 

17

 

 

 

10

 

 

 

17

 

 

 

110

 

Royalty

 

 

35

 

 

 

16

 

 

 

86

 

 

 

58

 

Contract research and government grants

 

 

 

 

 

43

 

 

 

 

 

 

106

 

Total revenues

 

 

2,376

 

 

 

314

 

 

 

4,609

 

 

 

904

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenues

 

 

2,511

 

 

 

1,841

 

 

 

4,954

 

 

 

3,463

 

Research and development

 

 

1,038

 

 

 

1,762

 

 

 

3,328

 

 

 

5,999

 

Impairment of intangible assets

 

 

120

 

 

 

 

 

 

120

 

 

 

 

Change in fair value of contingent consideration

 

 

 

 

 

 

 

 

(140

)

 

 

 

Write-down of fixed assets

 

 

1,108

 

 

 

 

 

 

1,319

 

 

 

 

Selling, general and administrative

 

 

6,312

 

 

 

4,292

 

 

 

16,750

 

 

 

11,689

 

Total operating expenses

 

 

11,089

 

 

 

7,895

 

 

 

26,331

 

 

 

21,151

 

Loss from operations

 

 

(8,713

)

 

 

(7,581

)

 

 

(21,722

)

 

 

(20,247

)

Interest expense

 

 

(15

)

 

 

(23

)

 

 

(23

)

 

 

(32

)

Other (expense) income, net

 

 

(7

)

 

 

 

 

 

10,214

 

 

 

83

 

Change in fair value of common stock warrant liabilities

 

 

4,777

 

 

 

1,130

 

 

 

4,601

 

 

 

6,212

 

Loss on extinguishment of warrant liability

 

 

 

 

 

(682

)

 

 

 

 

 

(635

)

Gain on extinguishment of PPP loan

 

 

1,123

 

 

 

 

 

 

1,123

 

 

 

 

Issuance and offering costs

 

 

 

 

 

 

 

 

(769

)

 

 

 

Net loss before income taxes

 

 

(2,835

)

 

 

(7,156

)

 

 

(6,576

)

 

 

(14,619

)

Income tax provision

 

 

(1

)

 

 

(9

)

 

 

(1

)

 

 

(15

)

Net loss

 

 

(2,836

)

 

 

(7,165

)

 

 

(6,577

)

 

 

(14,634

)

Net loss attributable to non-controlling interest

 

 

(661

)

 

 

(774

)

 

 

(1,199

)

 

 

(1,081

)

Net loss attributable to common stockholders

 

$

(2,175

)

 

$

(6,391

)

 

$

(5,378

)

 

$

(13,553

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.10

)

 

$

(0.60

)

 

$

(0.26

)

 

$

(1.42

)

Weighted-average number of shares used in per share
   calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

22,177,423

 

 

 

10,719,618

 

 

 

20,976,105

 

 

 

9,570,259

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on investment securities

 

 

 

 

 

 

 

 

 

 

 

(1

)

Foreign currency translation adjustment

 

 

(12

)

 

 

 

 

 

(24

)

 

 

 

Other comprehensive loss

 

 

(12

)

 

 

 

 

 

(24

)

 

 

(1

)

Comprehensive loss attributable to common stockholders

 

$

(2,187

)

 

$

(6,391

)

 

$

(5,402

)

 

$

(13,554

)

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


 

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Non-
Controlling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Interest

 

 

Equity

 

Balance at December 31, 2020

 

 

13,450,861

 

 

$

54

 

 

$

239,496

 

 

$

(211,825

)

 

$

 

 

$

827

 

 

$

28,552

 

Issuance of shares related to the
   January 2021 PIPE

 

 

7,876,784

 

 

 

8

 

 

 

15,508

 

 

 

 

 

 

 

 

 

 

 

 

15,516

 

Offering costs related to the January 2021 PIPE

 

 

 

 

 

 

 

 

(2,084

)

 

 

 

 

 

 

 

 

 

 

 

(2,084

)

Issuance of placement agent warrants related to
   issuance of January 2021 PIPE

 

 

 

 

 

 

 

 

942

 

 

 

 

 

 

 

 

 

 

 

 

942

 

Issuance of shares related to employee stock
   purchase plan

 

 

8,604

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Non-controlling interest capital contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

750

 

 

 

750

 

Stock-based compensation

 

 

 

 

 

 

 

 

325

 

 

 

 

 

 

 

 

 

 

 

 

325

 

Net income

 

 

 

 

 

 

 

 

 

 

 

2,058

 

 

 

 

 

 

(377

)

 

 

1,681

 

Balance at March 31, 2021

 

 

21,336,249

 

 

$

62

 

 

$

254,208

 

 

$

(209,767

)

 

$

 

 

$

1,200

 

 

$

45,704

 

Issuance of shares at closing of
   Arcadia Wellness acquisition

 

 

827,401

 

 

 

1

 

 

 

2,052

 

 

 

 

 

 

 

 

 

 

 

 

2,053

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Stock-based compensation

 

 

 

 

 

 

 

 

356

 

 

 

 

 

 

 

 

 

 

 

 

356

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,261

)

 

 

 

 

 

(161

)

 

 

(5,422

)

Balance at June 30, 2021

 

 

22,163,650

 

 

$

63

 

 

$

256,616

 

 

$

(215,028

)

 

$

(12

)

 

$

1,039

 

 

$

42,678

 

Issuance of shares related to employee stock
   purchase plan

 

 

6,585

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Stock-based compensation

 

 

 

 

 

 

 

 

354

 

 

 

 

 

 

 

 

 

 

 

 

354

 

Issuance of shares related to exercise of Service
   and Performance Warrants

 

 

14,000

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

22

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,175

)

 

 

 

 

 

(661

)

 

 

(2,836

)

Balance at September 30, 2021

 

 

22,184,235

 

 

$

63

 

 

$

257,009

 

 

$

(217,203

)

 

$

(24

)

 

$

378

 

 

$

40,223

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Non-
Controlling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Loss) Income

 

 

Interest

 

 

Equity

 

Balance at December 31, 2019

 

 

8,646,149

 

 

$

49

 

 

$

214,826

 

 

$

(207,171

)

 

$

1

 

 

$

621

 

 

$

8,326

 

Issuance of shares related to employee stock
   purchase plan

 

 

7,946

 

 

 

 

 

 

14

 

 

 

 

 

 

 

 

 

 

 

 

14

 

Stock-based compensation

 

 

 

 

 

 

 

 

772

 

 

 

 

 

 

 

 

 

 

 

 

772

 

Unrealized losses on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Non-controlling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

689

 

 

 

689

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

2,525

 

 

 

 

 

 

(102

)

 

 

2,423

 

Balance at March 31, 2020

 

 

8,654,095

 

 

$

49

 

 

$

215,612

 

 

$

(204,646

)

 

$

 

 

$

1,208

 

 

$

12,223

 

Issuance of shares related to exercise of
   June 2018 Warrants

 

 

1,392,345

 

 

 

1

 

 

 

5,568

 

 

 

 

 

 

 

 

 

 

 

 

5,569

 

Issuance of investor warrants related to
   May 2020 Warrant Transaction

 

 

 

 

 

 

 

 

4,415

 

 

 

 

 

 

 

 

 

 

 

 

4,415

 

Issuance of placement agent warrants related to
   issuance of May 2020 Warrants

 

 

 

 

 

 

 

 

215

 

 

 

 

 

 

 

 

 

 

 

 

215

 

Stock-based compensation

 

 

 

 

 

 

 

 

595

 

 

 

 

 

 

 

 

 

 

 

 

595

 

Non-controlling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

493

 

 

 

493

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(9,688

)

 

 

 

 

 

(205

)

 

 

(9,893

)

Balance at June 30, 2020

 

 

10,046,440

 

 

$

50

 

 

$

226,405

 

 

$

(214,334

)

 

$

 

 

$

1,496

 

 

$

13,617

 

Issuance of shares related to exercise of
   March 2018 PIPE

 

 

641,416

 

 

 

1

 

 

 

2,443

 

 

 

 

 

 

 

 

 

 

 

 

2,444

 

Issuance of investor warrants related to
   July 2020 Warrant Transaction

 

 

 

 

 

 

 

 

2,059

 

 

 

 

 

 

 

 

 

 

 

</